Page 10 - AsianOil Week 15

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Gazprom pushes ahead with work to expand Chinese gas sales
PIPELINES & TRANSPORT
RUSSIA’S Gazprom is pushing ahead with con- struction at its key fields in Eastern Siberia, as it looks to ramp up gas shipments to China.
The 1.2tn cubic metre (tcm) Chayandin- skoye field in Yakutia began exporting gas to China in December 2019 following the launch of the 38bn cubic metre (bcm) per year Power of Siberia pipeline. Gazprom reported in a statement last week it was setting up facilities required to raise the field’s output to the target plateau rate of 25 bcm per year. The gas giant also aims to wrap up construction of a second compressor station along Power of Siberia before the end of the year.
Power of Siberia was taken offline in March for two weeks of seasonal maintenance. The downtime appears to have been timed to coin- cide with a lull in Chinese gas demand because of coronavirus (COVID-19) lockdowns.
Power of Siberia is due to supply 5 bcm of gas to China in 2020 and up to 10 bcm in 2021. Gazprom has said before that the pipeline should flow at its peak capacity by 2025. To achieve this, the company intends to bring the Kovyktinskoye field in Irkutsk on stream by the end of 2022. Kovyktinskoye, with 2.7 tcm in reserves, will also produce 25 bcm per year at full capacity.
“Production drilling is in full swing at the Kovyktinskoye field,” Gazprom said. “Seven drilling rigs are currently in operation, and their number is going to be raised to 18 next year.”
Gazprom plans to start laying the section of Power of Siberia connecting Kovyktinskoye with Chayandinskoye in the third quarter of this year.
Russia also intends to establish a second pipe- line to China running through Mongolia. Rus- sian President Vladimir Putin cleared Gazprom in late March to begin the pre-investment phase of the project, which aims to deliver up to 50 bcm per year of gas to the Chinese market.
Gazprom also said last week it had laid the first 66 km of 390 km of pipe required to expand the 5.5 bcm per year Sakhalin-Khabarovsk-Vladiv- ostok (SKV) pipeline in the Far East. The project will enable increased gas supplies to domestic consumers, but it could also support additional sales to China, if a supply deal is agreed and if Gazprom can develop the necessary production capacity.
Meanwhile, construction of the Amur gas processing plant (GPP) due to treat Power of Siberia’s gas is now 58% finished, Gazprom said. Installation of core equipment at the first two of its six 7 bcm per year trains is almost complete, ahead of their scheduled launch next year.™
Image: Gazprom
China prepares to close Iraqi oil deal
PROJECTS & COMPANIES
LAST week’s news that China Petroleum Engi- neering & Construction Corp. (CPECC) had won a $203.5mn engineering contract to treat sour gas at the super-giant Majnoon oilfield in Iraq underlines how China is recovering from its coronavirus (COVID-19) quarantine and its ambitions in the Middle East.
The project, due to be completed within 29 months, aims to build a sour gas treatment facil- ity with a daily capacity of 4.39mn cubic metres, according to a statement issued by CPECC par- ent China National Petroleum Corp. (CNPC).
Iraq’s Majnoon oilfield, operated by state-run Basrah Oil Co. (BOC), is now producing around 240,000 barrels per day (b/d) and plans to boost output to 450,000 b/d by 2021.
With the US’ focus increasingly on dealing with the coronavirus outbreak at home, Beijing has good reason to believe that Iraq is open to its increased interest. This is about continuing to develop oil and gas field opportunities in geopo- litically ultra-sensitive areas, such as Iraq, on the basis of rolling contracts for specific work under- taken by companies that are not so prominent on
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w w w . N E W S B A S E . c o m Week 15 16•April•2020